Andrew Bud talks to Matthew Caines about the importance of security and privacy in mobile. Photograph: Press

The new Meffys consumer trust award will reward companies at the forefront of privacy and security. Why is it so important that mobile companies care for the privacy of their consumers and customers?

Quite simply, consumers won't spend money on mobile apps unless they trust them. Trust is hard earned. The more confidence consumers have in knowing what personal information is being used and how it will benefit them, the more confidence they will have to purchase. It's essential that app developers are upfront about what they are doing with users' information and why.

Consumer trust is a business critical issue and one that MEF is championing through its own work, including the recently launched privacy in mobile applications initiative. That's why we are recognising companies that can demonstrate best practice in this area through the new award.

Do you think mobile companies and apps are currently transparent enough and do enough to build trust with their users?

The industry is at the very beginning and there are few established standards or clear guidelines for how exactly to behave.

Companies are not actively trying to deceive consumers but need to be proactive to build consumer trust at this critical stage. Currently it's up to individual companies to decide what's right – that's very hard to do on your own, especially if your competitors are cutting corners. The industry would clearly achieve more with better co-ordination.

How and why is mobile getting it wrong?

It's often beneficial to the consumer for their data to be gathered and used to make an app free or to save annoying irrelevant questions every time an app is used. What's vital is transparency and informed consent and these can be very difficult to achieve without ruining the user experience.

Sometimes, this balance isn't struck quite right and is even more challenging when information is to be shared with third parties. Shared data is the most valuable of all – consumers don't mind receiving relevant targeted advertising based on purchases they've made in the past, for example. But when their information is sold to a company with whom they have no history, and they start receiving ads for products they don't need or want, then this is destructive.

Why would missing out on consent be so disastrous to the mobile market?

In 2011 TRUSTe published a survey in which one in three consumers named privacy as their number one concern when using mobile applications. The vast majority believe that privacy is an important issue and they want more transparency and choice over their personal information.

MEF's own global consumer survey showed that 27% of respondents cited security as the main reason they do not purchase more often on their mobile phone. Consent is crucial to trust and evidently trust is essential to growing the market. But should consumers ever feel betrayed, that can destroy a market for years.

What is the key to consumer trust?

Transparency and consumer control – people should know what information is collected, how it is being used and by who. They should then be able to impose limits at any time, or change the way the data is used. That way, they can make their own choices.

What practical steps can we take to protect consumers' privacy and drive mobile engagement?

Talk about it and co-ordinate. It's critical that the topic is front of mind for the mobile content and commerce industry. The industry must co-ordinate to develop and implement practical solutions and tools built on broadly established principles around transparency and user control.

Developers can then build apps based on a framework that suits both them and the consumer and know they are compliant with the industry mainstream.

The challenge is that the regulatory frameworks we have at the moment from government bodies such as the Federal Trade Commission and EU commission are limited by geography and, of course the mobile apps market is global.

MEF's member community represents the total mobile ecosystem worldwide and so we are uniquely positioned to develop practical tools to build consumer trust.

Some think that becoming too sensitive about permission boxes and privacy policies might stifle innovation – how can we ensure both innovation and developments in privacy and trust work in harmony?

That is exactly the challenge. It's about finding the balance between the consumer experience and ensuring full disclosure and consent. If this was easy we wouldn't be talking about.

Clearly the mobile experience is not suited to 2,000 word privacy policies; consumers want privacy information to be simple and accessible to help them make the right choice about whether or not to engage with an app.

Where should the mobile industry be looking to for inspiration around privacy and trust? Is it social media?

Social media is also struggling with these issues and has not been notably successful in securing consumer trust to date.

The creative industry has become very adept at passing information about rights and permissions between different companies, and we can learn from them.

The mobile industry can also look to its own experiences in content and commerce for examples of how co-ordinated self-discipline and self-regulation have protected the consumer without government intervention.

What does the future hold for mobile privacy?

As technology advances people will conduct more and more of their lives using a mobile device and those devices will have an ever-wider range of sensors built in. The opportunities to observe consumers' activities and behaviours will grow very quickly and opportunities for abuse of the individual's privacy will correspondingly increase.

It's vital that the foundations are laid now for attitudes, behaviours and business practices that will serve the consumer and the industry to build a sustainable future.

We look forward to honouring the companies making the first of these advances at the Meffys later this year.

Andrew Bud is global chairman for MEF. The Meffys are accepting entries until 19 July – find out more about the awards here